Global IME Bank, BoK start joint operation as Global IME Bank

Global IME Bank and Bank of Kathmandu (BoK) today started the integrated operation as Global IME Bank.

Following the merger, the bank's capital fund totaled Rs57 billion, deposit reached Rs 410 billion and loans Rs 400 billion with assets of Rs 500 billion and a network of 1,100 branches, according to a press note issued by the bank.

With a total of 365 branch offices, 367 ATMs, 286 branchless banking services, 61 extended branch offices, and 3 contact offices located abroad, Global IME Bank has more than 4 million customers, the press note reads, adding that the board of directors of the merged bank will consist of five directors including chair Chandra Prasad Dhakal from erstwhile Global IME Bank and two directors from erstwhile Bank of Kathmandu. The chief executive officer (CEO) of Global IME Bank Ratnaraj Bajracharya will continue as the CEO of merged bank.

Inaugurating the programme, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ reetariated the government main agenda as sustainable economic development and strengthening of the economy. “Understanding the need of the hour, we have decided to implement a balanced financial, industrial and monetary policy to make the economy dynamic and to objectively intensify cooperation and cooperation with the private sector to solve the problems seen in the economy,” he said, claiming that the country’s economy will accelerate, if the opportunities provided by the expansion and improvement of the banking sector can be properly utilised. Emphasising that the banking sector has a great role in making remittance transactions reliable and secure, the premier said that it is necessary for the banking sector to contribute not only to big projects but also in the areas of access to finance, financial literacy and self-employment by using the latest banking and financing products. “It would be easier to invest in big projects, if banks and other financial institutions merged and worked together but such mergers should boost financial efficiency and minimise unhealthy competition.”

On the occasion, chief secretary Shanker Das Bairagi said that the government is serious and will take effective steps in increasing their morale. “There have been positive indications in the country's economy lately,” he said, consoling the private sector not to fear. He also said that mergers will make it easier to raise resources for large projects and increase efficiency.

Likewise, central bank governor Maha Prasad Adhikari said that the merger process was pursued following increasing unhealthy competition and rising operating expenditures of financial institutions.

Urging the banks and financial institutions (BFIs) to focuse on self-regulation and invest in productive sector including small and medium enterprises (SMEs), he claimed that the merger policy will make the financial system more secure. “Due to increasing numbers of BFIs that led to the unhealthy competition, Nepal Rastra Bank (NRB) has adopted the merger and acquisition (M&A) strategy a decade ago.”

Though the NRB has brought merger bylaw in 2011 and revised it in 2012, the Monetary Policy of the fiscal year 2015-16 has encouraged mergers and acquisitions by increasing the paid-up capital of the BFIs. The Monetary Policy has increased the paid up capital of the commercial banks (Class A financial institutions) to Rs 8 billion, development banks (Class B financial institutions) to Rs 2.50 billion, and finance companies (Class C financial institutions) to Rs 800 million. 

Speaking on the occasion, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Shekhar Golchha asked the government and central bank to address three concerns to improve economy. “First, increase government spending; second make monetary policy restrictive but flexible too given the investment risks, and third, create an investment-friendly environment for private sector.”

“The economy will be strong only if the banks are strong,” he said, adding that the bigger banks after merger will also lead to bigger challenges. “To provide reasonable interest to the depositors and subsidised interest to the borrowers is also a huge challenge.”

Stating that BFIs are the backbone of the economy, Golchha said the profit of banks should also be seen, linking it with their investments.

Saying that reducing interest rates will boost the morale of industrialists and businessmen, Confederation of Nepalese Industries (CNI) president Vishnu Kumar Agrawal asked the government and central bank to decrease interest rate and ease liquidity. “Big banks should have bigger responsibility as well,” he said, urging the BFIs to lower the interest rate. “Encouraging to invest in productive sectors will not only contribute to national capital formation but also help government achieve revenue target.”

Informing about the merger, chair of the Global IME Bank Chandra Prasad Dhakal, on the occasion, said that the Global IME has merged and acquired a total of 21 BFIs to become the largest bank in the country. "This institution has been formed with the merger of five commercial banks and 10 development banks, apart from six financial institutions,” he informed, claiming the merged Global IME Bank as the first bank in terms of higest paid up capital. He also pointing out the risk involved as a big bank. “Being a big bank, there are risks and managerial challenges but we will be able to address them with our experience.”

Started his banking business from bringing remittances back home as a remitter, Dhakal said he will still gives high priority to remittance service. “We will give priority to bringing back money earned by the Nepalis in the Gulf and other countries.”

Global IME Bank, Bank of Kathmandu sign final pact to merge

Global IME Bank and Bank of Kathmandu (BoK) today signed a final memorandum of understanding for a merger.

Global IME Bank chairman Chandra Prasad Dhakal and BoK chairman Prakash Shrestha signed the final memorandum of understanding (MoU) for the merger amidst a programme in Kathmandu today.

After signing ceremony, Dhakal said large banks are need of the hour to invest in big infrastructure projects. Likewise, Shrestha said that big and capable banks are needed for economic transformation.

After the merger, the bank will become the largest commercial bank in Nepal with a total capital of Rs 57 billion, according to a press note issued by the banks. “The merged bank’s paid-up capital will reach Rs 35.77 billion with a total deposits of Rs 400 billion and loans of Rs 379 billion.”

Earlier, the board of directors (BoD) of both the banks had approved the share swap ratio of 1:1, based on the evaluation report of movable and immovable assets, liabilities and transactions received from the appraiser for the purpose of merger between the two banks. 

According to the press note, the name of the merged bank will be Global IME BoK, and the bank will consist of seven board of directors – five five from Global IME Bank including its chairman Dhakal. There will be two board of directors on behalf of Bank of Kathmandu. “The incumbent chief executive officer (CEO) of Global IME Bank Ratnaraj Bajracharya will remain as the chief executive officer of the merged bank. 

After the merger, Global IME BoK will have 385 branch offices, 367 ATM counters, 275 branchless banking services, 61 extended branch offices and 3 foreign contact offices, the press note reads, adding that the merged entity will have more than 4 million customers.

Global IME, Janata Bank start integrated operations

Global IME Bank and Janata Bank began integrated operations from today following the completion of the merger process.
The merger – between Global IME Bank and Janata Bank – is not only making the new entity the largest commercial bank of the country but also decreased the number of commercial banks to 27 from 28. The merged entity has started integrated operations under the name of Global IME Bank. While industrialist Chandra Dhakal is chairman, Parshuram Kunwar is the chief executive officer (CEO) of the merged Global IME Bank.
Addressing the beginning of integrated transactions of the Global IME Bank here today, finance minister Dr Yuba Raj Khatiwada said that banks should give priority to public benefits and interests. “Along with becoming the country’s largest bank, Global IME Bank should now keep public interest at its centre and work for the betterment of the entire banking sector,” he said, praising the merger.
Citing that a bank becoming bigger in size also means enhanced capacity to invest, Khatiwada urged Global IME to raise its investment in mega projects across different sectors.
The central bank had approved the merger plan of the two big commercial banks in the last week of September. The central bank had given them three months to complete the process and launch joint operations. Following the merger, the paid-up capital of Global IME Bank has reached Rs 24 billion making it the largest commercial bank in terms of paid up capital, apart from being the largest in terms of other key financial indicators like deposits and assets (loans). Likewise, Global IME Bank – after the merger – now has more than 300 branches, 295 ATMs and 33 extension counters across the country. 
On the occasion, the central bank governor Dr Chiranjibi Nepal said that the merger between Global IME Bank and Janata Bank will encourage other commercial banks to opt for mergers. “The merged banks, after getting larger in size, should also look at raising capacity of its management team and make ample investment in security issues,” he said, adding that different cases have shown that banks need to work on capacity building of its staffs. “Amid rising banking threats, banks should invest enough in its human resources and security.”
The governor also advised banks to not primarily focus on profits only as it is promoting unhealthy competition them. He also asked the board of directors of banks not to put undue pressure on the chief executive officers to increase profits.
The biggest merger in the banking sector – that began five months ago – is likely to put pressure on other commercial banks to seek merger partners also. Though most of the banks have already submitted written commitments for merger to the central bank, they have not yet made any breakthrough in finding a partner.
The central bank – earlier in June – had sought merger commitments from banks. The monetary policy for the current fiscal year 2019-20 has introduced a gamut of incentives including relaxation of the interest rate spread cap for those pursuing mergers.

Global IME, Janata Bank ink MoU for merger

Two commercial banks – Global IME Bank and Janata Bank Nepal – today decided to merge supporting the central bank’s move for a ‘big’ merger, and also to become the largest bank in the country in terms of capital size.
Global IME Bank and Janata Bank Nepal signed a memorandum of understanding (MoU) today, informed chairman of Global IME Bank Chandra Prasad Dhakal, after the signing ceremony. “We have decided to enter into a merger looking into central bank’s plan,” he said, adding that the new bank will retain the name ‘Global IME’.
The MoU was signed by Dhakal and chairman of the Janata Bank Keshav Rayamajhi, on behalf of their respective banks. They have agreed to name chief executive of Janata Bank Parshuram Kunwar Chhetry as the chief executive of merged entity and Global IME’s acting chief executive Mahesh Dhakal will be his deputy. “The share swap ratio has been set at 1:0.85,” Dhakal added. It means that investors holding 100 unit shares of Janata Bank Nepal will receive 85 unit shares of Global IME post merger. “However, the final swap ratio will be determined after the due diligence audit (DDA) report is finalized,” he said, adding that the management teams of both the banks will finalise all the necessary procedures within four months. ““We will now seek the letter of intent from the Nepal Rastra Bank for the merger, while a committee will work on the DDA simultaneously.”
According to the third quarter report of the current fiscal year 2018-19, the paid-up capital of Global IME and Janata Bank Nepal stands at Rs 10.31 billion and Rs 8.08 billion, respectively. Likewise, the reserves and surplus of Global IME Bank and Janata Bank Nepal stand at Rs 5.12 billion and Rs 1.75 billion, respectively. The joint entity – post merger – will have Rs 18.39 billion paid-up capital. “Likewise, Global IME’s net profit stands at Rs 1.87 billion and Janata Bank’s net profit stands at Rs 1.02 billion.”
 According to the MoU, the board of the joint entity will comprise of five directors from Global IME Bank and two from Janata Bank Nepal.
This will be the second merger for the Global IME Bank at the commercial bank level. Global IME Bank has already completed merger with the then Commerz and Trust Bank, apart from two development banks and two finance companies, and has acquired two development banks.
After the merger, the merged entity could post around Rs 5 billion net profit in the next fiscal year. However, the EPS wil stand at Rs 25.43, and the shareholders of both the banks shareholders will benefit from the proposed merger. 

IFC may extend $15m financing to Nepal’s Global IME Bank

The International Finance Corporation (IFC) – a member of the World Bank Group – has proposed to extend a $15 million financing facility to Global IME Bank to support the lender’s programme for small and medium sized enterprises, it said.
The bank is ranked as fifth among commercial banks in Nepal based on its total asset base of Rs 124 billion ($1,151 million) and loan portfolio of Rs 89.7 billion ($833 million) as of April 13, 2018. The bank will prioritise lending to enterprises in tourism, agriculture, micro finance and small and cottage industry sectors. SME financing will cover both daily business operations and capital expenditure. "This project is part of a concerted effort by IFC in the Nepali financial sector to enable local banks to access long term US dollar resources,” as per the disclosure.
Global IME Bank has a network of 129 branches across the country. The Nepal Stock Exchange (Nepse)-listed bank is 51.2 per cent owned by the promoter group while the remaining is held by the public. IME Group, chaired by Chandra Prasad Dhakal, is engaged in a number of sectors including banking and insurance, automobiles, energy, logistics, IT, infrastructure and tourism.
IFC has also proposed a $15 million investment in NMB Bank to support its lending activities in the SME space. IFC has been present in Nepal started since 1956 and is among a handful of organisations financing sectors like agribusiness, transportation and trade finance. In 2015, IFC financed $7 million equity in Business Oxygen (BO2) – a private equity fund in Nepal – followed by a $7.3 million add on investment in the fund.

Global IME Bank launches 3D secure services to make online transactions more secure

Global IME Bank from today launched 3D secure services for its credit cardholders to perform online transactions and now part of initial few banks that offer such services in Nepal.
"The service allows Global IME Bank credit card holders to use their cards during online transactions and allow them to participate in verified by visa process," the bank said, adding that the new value-added service by Global IME Bank is an extension of the banks mission to reiterate its commitment to its consumers to meet the needs of an ever-changing market in terms of security, technology, and financial solutions. "The few simple steps will enable cardholders to activate the new feature while performing first ecommerce transaction where customers need to enroll and set credentials for future usage."
Subsequent online purchases will then be validated with additional layer of security for cardholder’s authentication, said the Global IME Bank that has in association with visa partnered with Izealiant Technologies for implementing the solution that provides flexibility to choose authentication types like password or OTP depending upon customer preference.
As a direct benefit, Global IME Bank cardholders can now enjoy additional security for their online card usage on various ecommerce sites worldwide, it claimed. "It will also increase acceptance across more merchants participating in 3D secure services for using Global IME cards."
The protective feature enables the bank to authenticate not only the card but also the cardholder during payment of internet purchases thus protecting their online transactions against theft and illegal use of cards, it added.
Acting chief executive of the Global IME Bank Janak Sharma Poudyal said that the bank's new 3D Secure Services for card holders plays a significant role as it enhances security which is a critical aspect of any online business transaction. "This along with our impressive card features ensures that we always meet the evolving security needs of our customers to give them a world class banking experience," he added. 

Some 286 branchless banking points to open in underserved regions

Seven banks are opening 173 branchless banking points in 14 districts affected by the devastating earthquake of April 25.
Seven commercial banks and Sakchyam Access to Finance Program signed an agreement today to open 173 Branchless Banking (BLB) outlets in 14 districts affected most severely by the earthquake. "As part of the partnership, Citizens Bank, Global IME Bank, Nepal Investment Bank, NMB Bank, Rastriya Banijya Bank, Sanima Bank and Siddhartha Bank have already setup 55 branchless banking points with the remaining to be established by the end of November," a statement read.
The launch of these crucial financial services comes at a point when the financial sector is under pressure to provide quick access to financial services in far-flung areas of the 14 districts.
The central bank is moving aggressively to expand branchless banking outlets throughout the country in line with its monetary policy, Nepal Rastra Bank governor Dr Chiranjibi Nepal said, addressing the signing ceremony. "The central bank is committed to working with banks and the government to provide a sustainable basis for expanding its goals of financial inclusion and expediting government to people (G2P) payments in an efficient manner," he added.
"The establishment of delivery points and making them sustainable holds key in achieving financial inclusion," joint secretary at the Finance Ministry Suresh Acharya. "The government intends to establish the right incentives for banks working with the central bank to rollout G2P and other cash transfer programmes, through networks such as the ones created by banks with Sakchyam support," he added.
Likewise, director general at the Department of Civil Registration Basanta Raj Gautam said that the government was finalising pricing structure for its implementation. "We have had presentations from Sakchyam on the basis for pricing and been looking at international as well as our own experiences to date," he said, adding that government would work closely with the banks to develop a sustainable model for delivery of G2P services.
Likewsie, reiterating the Government of UK's commitment to accelerate the deepening of access to financial services in rural Nepal, Economic Development Team Leader at DfID Gareth Weir, said that the active deliberation will enable retail finance and G2P payments through the banking sector.
On the occasion, Sakchyam Team Leader Baljit Vohra briefed about Sakchyam's achievements. "Sakchyam is supporting opening of 286 branchless banking outlets in mid and far-west and in quake-affected districts," he said, adding that the transformational BLB strategy includes the use of Point of Sale (PoS) machines, mobile phones and tablets enabled through agents, extensions counter and physical branches to rollout micro-banking products, G2P payments and value chain financing models that will further deepen financial-service penetration for households and enterprises in the remotest areas of the country.

Global IME Bank, Commerz and Trust Bank Nepal to start operating as one unit after third quarter

Global IME Bank and Commerz and Trust Bank Nepal today signed the final Memorandum of Understanding for merger.

The merged entity in the name of Global IME Bank will start operating as a single unit after the third quarter, said Global IME Chairman Chandra Prasad Dhakal after signing the memorandum of understanding with chairman of Commerz and Trust Bank Nepal Shovakar Neupane, on behalf of their respective institutions here today.

One of the promoters from the Commerz and Trust Bank Nepal will represent in the board, Dhakal, said, adding that the remaining board members and the chief executive of the current Global IME Bank will continue to serve the institute.

Though, it is the second merger among the two commercial banks after NIC Bank and Bank of Asia Nepal (currently NIC Bank of Asia) lat July, the merger will be the first of its kind in terms of different promoters in two institutions.

By mid-April, the two Class 'A' banks will be completely merged, he added.

Both the commercial banks have scheduled their annual general meetings next month to get their merger proposals endorsed by the shareholders.

Commerz and Trust is holding its AGM on March 3, whereas Global IME has scheduled its AGM for March 5.

The merged entity is planning to publish a single merged third quarterly financial report,” Dhakal added.

The merger will help increase paid up capital that will give us more room for investment in productive sectors and large-scale projects,” Dhakal said.

The merged Global IME Bank will have Rs 4.10 billion paid-up capital.

Global IME Bank had earlier merged with two Class 'C' financial institutions –IME Finance and Lord Buddha Finance – to form Global IME Bank. Later, it merged with Social Development Bank and Gulmi Development Bank too.

After the central bank's initiation, the banks and financial institutions have been taking merger as a safe landing due to shrinking market size and and also to reduce operating cost.

The central bank had issued Merger Bylaws in May 2011 to facilitate the mergers, though it is planning to bring Acquisition Bylaw soon.

Currently, some 43 banks and financial institutions are planning mergers to become 18 institutions. Likewise, some 23 banks and financial institutions have taken Letter of Intent (LoI) from the central bank to merge.

Global IME calls special AGM to finalise merger with Commerz and Trust

Global IME Bank has called special annual general meeting on March 4 to endorse the merger with Commerz and Trust Bank Nepal.

The special AGM scheduled to take in Birgunj will endorse the merger with Commerz and Trust Bank by ratifying Due Diligence Audit (DDA) report and finalise the share swap ratio, and convert more than 51 per cent of the bank’s promoter shares into ordinary shares.

The central bank had formally endorsed the merger plan of Global IME Bank and Commerz and Trust Bank, in December.

 The two commercial banks had signed merger agreement on November 10, 2013 and proposed the share swap ration at 100:65.
After the merger between Global IME Bank and Commerz and Trust Bank, it would be the second merger between the commercial banks as the first one was NIC Bank and Bank of Asia Nepal.

Nepse suspends Global IME, Commerz and Trust Bank Nepal shares trading

Nepal Stock Exchange (Nepse) today suspended stock trading of Global IME Bank and Commerz and Trust Bank Nepal as they have yesterday entered into an agreement to merge yesterday.

The Nepse after getting the information of the merger between the two commercial banks has suspended their stock trading, according to the secondary market, where per unit share of Global IME Bank  has been traded at Rs 430 per unit, whereas Commerz and Trust Bank Nepal's stock was traded at around Rs 200 per until yesterday.

Meanwhile, the Nepse index today defied the strike and posted a double digit gain closing at a four year high of 591.22 points from the morning's opening of 580.45 points due to all the seven sub groups gain.

The insurance sub group is the highest grosser as it has gained 39.76 points in a day, followed by others sub group – that gained 17.62 points – due to Nepal Telecom's gain.

Global IME‚ Commerz and Trust Bank Nepal plan merger

Global IME Bank and Commerz and Trust Bank Nepal today signed a Memorandum of Understanding (MoU) to consolidate the two financial institutions.
Chairman of Global IME Bank Chandra Dhakal and chairman of Commerz and Trust Bank Shovakar Neupane signed the MoU that could lead to the biggest merger between the two commercial banks in the country.

"The paid up capital of the merged entity will stand at Rs 4.41 billion," Dhakal said after the signing ceremony here today. " Global IME Bank currently has a paid up capital of Rs 2.42 billion, whereas Commerz and Trust Bank has a paid up capital of Rs 2 billion," he said, adding that the total deposit – after the merger – will stand at Rs 48 billion.

They will conduct a due diligence audit after filing an application to the central bank. "We will fix share swap ratio, after the results of the audits," added Dhakal, who will remain chairman of the merged Global IME Bank that is also the merged entity with five other financial institutions.

Likewise, the current chief executive of Global IME Bank Ratna Raj Bajracharya will also retain his position in the consolidated unit. "The board of the merged entity will include one representative from Commerz and Trust Bank Nepal," according to the bank that has booked a net profit of Rs 271.43 million in the first quarter of the current fiscal year.

Similarly, Commerz and Trust had posted a net profit of Rs 58.62 million in the last fiscal year.

Global IME Bank's has been trading its shares at Rs 430 per unit, whereas Commerz and Trust Bank Nepal has traded its shares at around Rs 200 per unit today.

The merged bank – that will have 451,000 customers after the merger – will be the second merger, if it completes its merger successfully, after the merger of NIC Bank and Bank of Asia Nepal.